Growth-oriented approaches to climate challenges

The most persistent argument against climate action? "We can't decarbonise without killing economic growth." This idea of "degrowth" is what dominates headlines and feeds. But what if the data tells a different story? The "Our World in Data" chart shows a powerful result: Decoupling is possible. A growing number of countries have successfully managed to grow their economies while actively reducing their consumption-based CO₂ emissions. Consider the leaders in this decoupling race (2005-2020): ↳ Finland: +12% GDP per capita, -44% Emissions ↳ Sweden: +12% GDP per capita, -41% Emissions ↳ Denmark: +8% GDP per capita, -41% Emissions ↳ Ireland: +43% GDP per capita, -50% Emissions This is the result of deliberate, systemic policy choices: ↳ Investment in renewable energy. ↳ Strong carbon pricing mechanisms. ↳ Driving energy efficiency across industries. ↳ Shifting from heavy industry to service-based economies. This data doesn't suggest the job is done. The pace of decoupling does still need to accelerate dramatically. But if economic growth and emissions can be decoupled, is 'degrowth' still a relevant climate solution?

Climate Action and Resilience 🌍 As climate risks intensify and regulatory expectations evolve, companies across sectors are under pressure to adopt more strategic and integrated climate responses. This requires a shift from isolated actions to system-wide business transformation. A comprehensive climate strategy involves more than emissions reductions. It starts with aligning climate priorities with corporate strategy, embedding them into investment and risk management decisions, and ensuring board-level accountability. Robust GHG accounting and disclosure frameworks are essential. Measuring Scope 1, 2, and material Scope 3 emissions using recognized protocols enables businesses to understand their impact and develop informed strategies. Transparent reporting aligned with leading frameworks such as ISSB and TCFD builds credibility and investor confidence. Operational adjustments play a critical role. From transitioning to renewable energy and increasing efficiency to electrifying fleets and evaluating climate-related risks, every step contributes to reducing exposure and enhancing resilience. Supply chains must also evolve. Integrating climate criteria into supplier selection, improving traceability, and collaborating to lower upstream emissions are key steps in building more resilient and sustainable value chains. Product and service decarbonization offers a pathway to long-term differentiation. Businesses are rethinking product design through circular economy principles and regenerative models, while supporting customers in lowering their environmental footprint. Internal alignment is equally important. Building climate competencies across leadership and staff, supporting local adaptation efforts, and engaging in cross-sector coalitions accelerates meaningful transformation. The path forward requires more than commitment. It calls for a structured, multi-level approach across strategy, operations, procurement, product, and people systems to drive real progress in climate action and resilience. #sustainability #sustainable #esg #business #resilience

Even the world’s largest, most sophisticated investors—those that understand financial climate risk deeply—are structurally constrained from financing the transformations needed to reduce that risk at its source. Simon Mundy's recent Financial Times article on Norway’s $1.8 trillion sovereign wealth fund (Norges Bank Investment Management) is a powerful illustration. NBIM’s own modeling suggests that climate change could wipe out 19% of the value of its U.S. equity holdings. Yet its mandate—to maximize returns with reasonable risk—limits its ability to “more aggressively support climate change mitigation.” This isn’t a critique of NBIM. It’s a reminder that asset owners, no matter how committed or informed, cannot - on their own - deliver the systemic transformations that meaningful climate action requires. There is a better approach: coordinated, multi-actor strategies that are both more effective and entirely doable. Systemic transformations—redesigning energy systems, electrifying transport, decarbonizing industry—require multi-actor coordination, institutional arrangements, and financing tools that go far beyond conventional portfolio strategies. Moreover, two-thirds of future emissions are projected to come from emerging and developing economies. But most institutional capital is not flowing there, constrained by high perceived risk and low credit ratings. Mitigating climate risk requires unlocking affordable finance in EMDEs. Financial institutions can and should be core partners in confronting planetary and financial climate risk. But today’s dominant approaches—corporate target-setting, exclusions, portfolio realignment, etc.—are not enough. The more effective strategy for large asset owners who understand climate risk is to work with governments, MDBs, utilities, and real-economy actors to co-design and co-finance system-wide transition pathways. Another basic reminder is that finance follows markets, not the other way around. When coordinated transition strategies reduce fossil fuel demand, improve the risk-adjusted returns of low-carbon alternatives, and de-risk investments through mechanisms like long-term offtake agreements or expanded credit enhancements, capital will follow. Pressure on financial institutions alone will yield, at best, inherently modest and limited results. Some argue that in the absence of stronger political leadership, incremental steps by financial institutions are better than nothing. But in many parts of the world, the real bottleneck isn’t political will—it’s the structural constraints of the financial system and the lack of coordinated engagement among economic actors. In developed economies, much can be done through subnational governments, public utilities, regulators, and public procurement, even without federal action. What’s missing is not intent but practical, multi-actor coordination—and that is entirely within reach. https://lnkd.in/eueSRXqt

How is South Asia is transforming climate challenges into opportunities for global leadership? This co-authored piece with Farwa Aamer (Asia Society Policy Institute) showcases how the region is pioneering innovative climate solutions: * Bangladesh's early warning systems have reduced cyclone casualties from 500,000 in 1970 to under 5,000 today *India's Ahmedabad Heat Action Plan has prevented over 2,300 deaths through smart urban planning *Nepal's community-managed forests are becoming a model for sustainable ecosystem management The region isn't just adapting - it's leading. From India's Coalition for Disaster-Resilient Infrastructure to Bangladesh's globally-recognized community adaptation models, South Asia is showing how emerging economies can drive positive climate action while balancing development needs. Stephane Hallegatte Martin Raiser Valerie Hickey Dina Umali-Deininger Ann Jeannette Glauber Abhas Jha Swarna Kazi Mehul Jain Mehreen Sheikh Jia Li #ClimateAction #SouthAsia #ClimateResilience #Sustainability #Development #ClimateLeadership

To become ‘Viksit Bharat’, our climate goals and growth requirements needn’t be mutually exclusive. India provides a solid foundation for the global clean energy transition. But to ensure the targets are met, the following areas remain crucial: • EmTech: The private sector requires commercial incentives to accelerate the production of clean energy. While there are significant capital gains, emerging technologies like green hydrogen remain expensive. There have to be greater incentives to scale up adoption and use.   • Financing: Environmental sustainability has the potential to contribute 5% to India’s GDP, compared to the current estimates of 1.5–2%. But the electricity sector alone requires $500 billion over the next 7–8 years. So far, there haven’t been many obstacles to debt financing. Blended finance products are needed to channel private capital into the sector.   • Supply Chains: While domestic manufacturing has to be boosted, a dichotomy exists between cheaper power from imported technologies and a secure supply chain. A balanced trade-off can be reached only through greater international collaboration.   The clean energy sector is expected to attract enough capital to meet India’s growing demand by the early 2030s, just so the electricity sector’s emissions can begin peaking by the middle of the decade. Projects will require reasonable returns, well-managed risks, and structured contracts, all of which are possible with a policy ecosystem that remains supportive and calibrated. Great discussion with Rajiv Gupta, R P Gupta, and Sourav Majumdar at Business Today #BTIndiaAT100.